A blue-ribbon government panel on administrative reform agreed Monday to turn the Defense Facilities Administration Agency into a bureau within a relevant government body.

The agreement came on the first of four days of intensive discussions of the Administrative Reform Council, headed by Prime Minister Ryutaro Hashimoto.

During Monday's council meeting, the 15 members also agreed to appoint a special Cabinet minister to deal with Okinawa-related matters even though they agreed to downsize the Okinawa Development Agency. The council members agreed that functions of the Cabinet should be strengthened and the prime minister's leadership should be reinforced, supported by the Cabinet Secretariat, a new Cabinet office and a new general affairs ministry.

In line with an international trend to place importance to environmental issues, the Environment Agency will be upgraded to a full-scale ministry, they agreed. The council also agreed the current system of channeling postal savings and insurance funds to the Finance Ministry's fund management section, or the Financial Bureau, be drastically reviewed.

In line with the review, the Financial Bureau should be scrapped, the panel agreed. The "zaito" fiscal investment and loan program, which has distributed such funds to governmental institutions, has been criticized for its opaque nature.

As part of efforts to reform the powerful Finance Ministry, the panel suggested that the National Tax Administration Agency be made more independent and given full management power over personnel-related affairs. Currently, high-ranking positions of the agency are likely to be occupied by Finance Ministry officials.